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The KSh 40B Olkaria Deal, and How Weld-Con Engineering Earned Its Place
Liz Neke
August 28, 2025 • Estimated Reading Time: 13 minutes
In March 2024, KenGen, Kenya’s national electricity generator, awarded a multibillion-shilling contract to SEPCO III Ltd to rehabilitate Olkaria I, the country’s oldest geothermal power plant.
Projects of this size rarely see major scopes go to local firms, there’s a lingering cynicism about whether they have the capacity.
However, one Kenyan company, Weld-Con Engineering, has succesfully completed the installation, alignment, and assembly of Olkaria I’s steam turbines, a complex, high-stakes scope that proved a Kenyan firm can meet world-class engineering standards at the heart of a billion-shilling project.
Image credit: KenGen
In this article:
Why Weld-Con's Work at Olkaria Matters
A Summary of the Olkaria I Project in 5 Points
How Large EPC Projects Like Olkaria Work
Weld-Con's Technical Role at Olkaria I
The Weld-Con Playbook
Can Locals Bypass The Foreign Lead?
The Bottom Line
WHY WELD-CON'S WORK AT OLKARIA MATTERS
Weld-Con's role provides a valuable case study for how local engineering and construction firms can capture higher-value work when they prove their chops.
Image credit: Weld-Con Engineering
Historically, African participation in megaprojects has been limited to low-skill construction or logistics.
However, firms like Weld-Con are breaking into the “core” engineering work such as fabrication and installation, areas that:
carry higher margins,
develop technical capacity,
and create exportable expertise.
The company's role in the Olkaria project is proof that Kenya’s industrial capabilities are maturing.
If the country can replicate this in other sectors, e.g. oil & gas, mining, water treatment, and manufacturing, the economic impact would be profound.
A SUMMARY OF THE OLKARIA I PROJECT IN 5 POINTS
The Olkaria Geothermal power station in Hell’s Gate, Naivasha [Image credit: SGC]
1. Project Owner & Location:
KenGen (Kenya Electricity Generating Company) is leading the rehabilitation of Olkaria I, Kenya's oldest geothermal power plant, located in the Olkaria geothermal complex within Hell’s Gate National Park, Rift Valley region .
2. Project Scope & Value:
The project aims to upgrade capacity from 45 MW to 63 MW, a 40% increase, at an estimated value of over KSh 40 billion .
3. Contractors & Suppliers:
SEPCO III (China) is the Engineering, Procurement, and Construction (EPC) contractor overseeing the full scope of the project .
Toshiba Energy Systems & Solutions (Toshiba ESS) is supplying the three new steam turbines and generators, each uprated from 15 MW to about 21 MW per unit .
Vemart Engineering (working with Steam & Gesto Consortium) is handling the engineering consultancy and construction supervision.
Weld-Con Engineering (Kenyan firm) managed the turbine installation, conducting precision welding, mechanical fit-up, and alignment inside the active facility.
4. Progress & Timeline:
As of mid-2025, rehabilitation work is approximately 70% complete, with the first turbine expected to be commissioned by June 2026 .
5. Strategic Impact:
Once completed, the project will deliver an additional ~18–20 MW to the national grid. This brings Kenya closer to joining the exclusive “Geothermal Gigawatt Club”, an informal term used in the energy sector for countries that have more than 1 gigawatt (GW) of installed geothermal electricity generation capacity. (Enough electricity to power roughly 750,000–1,000,000 homes depending on consumption patterns.)
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HOW LARGE EPC PROJECTS LIKE OLKARIA WORK
To understand how Weld-Con fits into the Olkaria project, which is structured as an EPC contract, we first need to break down what an EPC value chain looks like.
EPC stands for Engineering, Procurement, and Construction. Think of it as a “one-stop-shop” model for building large, complex infrastructure.
Instead of the client (in this case, Kenya Electricity Generating Company – KenGen) hiring different companies to design, source equipment, and build separately, one main contractor takes full responsibility from start to finish.
This model shifts much of the execution risk to the EPC contractor, but it also creates a layered supply chain, one where local firms can plug in and grow their capabilities.
The EPC model is typically made up of 4 layers:
1. The owner:
They commission the project and secure financing. In Olkaria’s case, that’s the Kenya Electricity Generating Company (KenGen).
2. Lead contractor:
The EPC firm responsible for the full design and build, often at a fixed price. For large projects that are externally funded, they are usually tied to the financier’s country. In this case, the main EPC contractor is SEPCO III, a Chinese engineering giant.
SEPCO III head offices in China [Image credit: sepco]
3. Original Equipment Manufacturers (OEM):
These are the major equipment suppliers, and will typically also be from the same or allied countries as the financier. For Olkaria, the OEM is Toshiba.
Toshiba head offices in Japan [Image credit: HRMOS]
4. Local subcontractors:
Firms like Weld-Con and Vemart Construction, who execute specialist scopes of work within the broader project, such as civil works, fabrication, and auxiliary services.
WELD-CON'S TECHNICAL ROLE AT OLKARIA I
As one of the subcontractors on Olkaria Units 6 and 7, Weld-Con was entrusted with delivering precision welding, structural fabrication, and on-site assembly of critical plant components.
Their scope would have covered 3 main areas:
1. Welding & fabrication
This would involve the secure joining of large turbine components, steam piping, and auxiliary systems under strict engineering codes (often ASME standards). For geothermal plants, these welds need to withstand extreme pressure and temperature cycling.
2. Alignment
Steam turbines have rotor shafts that must be aligned within extremely tight tolerances (often fractions of a millimeter). Misalignment can cause vibration, efficiency loss, or even catastrophic failure. Precision alignment requires specialized laser alignment tools, dial gauges, and highly skilled technicians.
An industrial steam turbine [Image credit: Allied Power Group]
3. Precision assembly
Turbines aren’t “dropped in” as a single unit; they’re assembled on-site from multiple sections (casing halves, rotor, blades, bearings). Weld-con’s job would have been to ensure each assembly step met the OEM’s exact tolerances.
This wasn’t a case of “labour-only” subcontracting. By successfully executing their scope under a global EPC leader, Weld-con not only reinforced its reputation locally, but also signals that Kenyan firms can compete, and excel, in complex industrial environments.
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THE WELD-CON PLAYBOOK
When you see foreign names dominating EPC contracts (SEPCO, Toshiba, Hyundai, Sinohydro, etc.) it’s not necessarily because locals aren’t capable.
The ongoing Olkaria I Geothermal Rehabilitation Project [Image credit: Weld-Con Engineering]
It’s because these projects are:
Huge in scale (often $500M+, multi-year builds).
Heavily financed by foreign lenders who attach “must use our companies” conditions.
High-risk technically (power plants, oil pipelines, large dams), the margin for error is tiny.
So, local firms often get boxed out of the main contractor slot before the bidding even begins.
By the time tenders hit the market, the prime contract is already earmarked for a foreign EPC that comes packaged with financing.
Even when African governments want to “build local,” the lenders often insist on an international partner to "de-risk" their investment.
However, in an EPC project, 60–70% of the physical work still needs to be done on the ground, often by local crews.
The EPC firm will slice the project into packages and sublet them to vetted locals.
If you have the technical chops in terms of certification, safety compliance, and capacity, you can land a good slice.
For example:
Civil works: foundations, site prep, access roads
Mechanical installation: pipe welding, fitting, steel erection
Electrical works: cabling, switchgear installation
Commissioning support: assisting the EPC during final testing
This is where companies like Weld-Con come in. They’re not the EPC lead, they’re specialist subcontractors.
They survive (and thrive) by:
Building deep technical expertise in a narrow field (mechanical).
Maintaining world-class compliance, including ISO certifications, safety records and audited finances.
Being relationship-driven, knowing the EPC players and being on their “approved supplier” lists.
Delivering flawlessly, so when the next project comes, they’re first in line.
It’s not glamorous, and they don’t always get the headline credit, but they get steady, high-value work without taking the full risk burden of being the EPC lead.
CAN LOCALS BYPASS THE FOREIGN LEAD?
On mega-projects financed externally, locals can rarely bypass the foreign lead, the financing structure is the real gatekeeper. But there are pathways where locals can lead.
If the goal is to move toward larger project roles, there are 6 practical steps for local firms to capture more value:
1. Narrow to a world-class niche, then scale horizontally.
Becoming the go-to in a high-demand technical field (like welding to nuclear standards, or SCADA system integration) and then partner to expand scope. Weldcon’s turbine installation is the sort of niche credibility that opens doors.
2. Form stronger consortia and joint ventures.
Multiple local firms can team up with a smaller foreign partner to strengthen capacity, or they can combine strengths (engineering, finance, fabrication) to meet EPC prequalification thresholds. Consortia reduce the “single firm” turnover requirement barrier.
3. Upgrade financial capacity and bonding.
Develop relationships with local banks and insurers to offer performance bonds and advance guarantees that satisfy owners and lenders.
4. Invest in QA/HSE and certifications.
ISO, welding qualifications to ASME/EN standards, and documented QA systems are non-negotiable to be eligible for high-value packages.
5. Seek locally funded or PPP projects.
Projects funded domestically e.g., government or private developers paying from local budgets or PPP projects (if locals can raise their own financing) reduce tied-finance constraints and provide opportunities for local lead roles.
6. Leverage small wins into marketing assets.
Document case studies, measurement reports, and OEM endorsements (e.g., a Toshiba site-supervised sign-off) to make a compelling pitch for larger packages. Each well-executed role (like Weld-con's turbine installation at Olkaria) is a marketing asset that reduces perceived risk of hiring local firms.
THE BOTTOM LINE
The Olkaria case shows both the reality of financing large projects and the opportunity to build local capacity at a world-class level.
Multinationals still dominate because they can finance, guarantee, and deliver large EPC projects.
Yet local firms like Weld-con are proving that with the right specialization and track record, they can insert themselves into the very heart of billion-dollar projects.
The question is whether Kenyan firms will stop at subcontracting, or whether they will start building the capacity, be that financial, technical, or strategic, to one day compete for full EPC contracts.
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